This month California Gov. Gavin Newsom (D) announced the state would be paying off $10.5 million in school loan debt for 40 dentists and $58.6 million in school loans for 247 doctors. The debt relief, provided through a loan repayment program established last year (SB 849) that received additional funding in the state budget passed in June, is aimed at addressing the state’s health care provider shortage. To receive a grant from the CalHealthCares program, dentists and doctors have to pledge to devote at least 30 percent of their caseloads to enrollees of the state’s Medicaid program, Medi-Cal, for five years.

“If you support providing quality care to Medi-Cal patients, we are going to support your journey by providing a little bit of relief on these loans,” Newsom said at a press conference highlighting healthcare investments in the budget.

The spending plan allocates $120 million for the loan repayment program, bringing the total appropriated for that program to $340 million, all of which is being funded by tobacco tax increases approved by voters in 2016 (Proposition 56). Nearly 1,300 providers have applied for CalHealthCares grants, which cover up to $300,000 in dental or medical school loans.

Loan forgiveness programs have grown in popularity among state and local governments as competition for physicians has increased nationwide. The situation is particularly challenging in California, with one of the lowest ratios of medical school students to overall population in the nation (18.4 per 100,000 people, compared to the national average of 30.3), with a third of the state’s practicing doctors approaching retirement age and a state Medicaid program that is growing rapidly, now covering about a third of the population. (LOS ANGELES TIMES, KTLA 5, CALIFORNIA MEDICAL ASSOCIATION)